update-grub ignoring GRUB_GFXMODE only

I uncommented /etc/default/grub and changed to following:

GRUB_GFXMODE=2560x1440x32

Then, ran sudo update-grub without issues. Now, the /boot/grub/grub.cfg still contains:

...
if loadfont $font ; then
  set gfxmode=1280x720,1280x800,auto
  load_video
...

As expected, the resolution was 1280x720. Before someone asks: 1. I didn't touch /boot/grub/grub.cfg so far. Only cated it. 2. Modifying any other variable like GRUB_TIMEOUT in works correctly. 3. 2560x1440 instead of 2560x1440x32 didn't work either. 4. Adding GRUB_GFXPAYLOAD_LINUX=keep in /etc/default/grub got updated in /boot/grub/grub.cfg didn't help. 5. 2560x1440 is my native resolution as confirmed by xrandr and works fine. grub also is fine with it as evident below. The only thing that currently works is modifying /boot/grub/grub.cfg on previously mentioned line:

...
if loadfont $font ; then
  set gfxmode=2560x1440x32,auto
  load_video
...

**TLDR:** update-grub ignores GRUB_GFXMODE when it's updating /boot/grub/grub.cfg. Is there a way to get verbose output when running update-grub? I am on kali-linux/Debian dual booted with Windows 11.